Fannie Mae-No Politics (FNMA)

[The Man With No Name]

If the Plaintiffs are asking for an Injunction, wouldnt they have cause to ask for a TRO for any crampdown/conversion by the UST and FHFA? Doesn't Bhatta now make any move to cramdown and conversion off the table until this case is resolved? A SPS conversion would definitely inflict irrepable harm as you have made clear so unless this case is dismissed isnt any move toward a conversion not possible especially by a regulatory agency. Sandra Thompson does not strike me as a rogue regulator.

No. You misunderstood what the Plaintiffs are now asking for. They want the SPS to be converted to commons (or written off for free). If they go the conversion route (given the choice between writing off for free or converting, Treasury will convert 100% chance), existing commons will be diluted 99+%...even before any dilution by the warrants.

Another question - doesnt Bhatti just increase the option value of FMCC and FNMA equity since this probably takes any conversion off the table for 1 to 2 years while this case is resolved. Only a settlement would make the time to resolution shorter and no one is settling for 10 cents.

Conversion could come at any time. Mainly because it moots all cases regarding JPS.

It's not a matter of settling for 10 cents, it's what commons are worth. If conversion happens, any damages to commons are nil in the big picture.

Furthermore, the capital gains paid by JPS holders would more than cover any damages to commons.